While progress has been made in the discovery and development of drugs to treat HIV infection, significant problems remain, including the development of drug resistance. In order to expand treatment options and reduce the rate of resistance development, drugs that target viral replication at points other than RT and protease are urgently needed. To address this problem, Panacos Pharmaceuticals has developed a novel approach to identifying small molecule inhibitors of HIV fusion. This technology consists of a high-throughput method of screening for compounds that block gp41-mediated fusion by disrupting the formation of envelope structures critical to virus entry. This proprietary approach is unique in that it utilizes a native form of viral envelope rather than synthetic peptides to screen for inhibitors of gp41 function. Panacos has initiated a screening campaign to identify small molecule inhibitors of HIV fusion. We have evaluated approximately 30K compounds during the first 2 months of the campaign and have commenced characterizing the hits from this effort in secondary and tertiary assays. These results will serve as a basis for our fusion inhibitor hit-to- lead optimization program which utilizes SAR (structure activity relationship) analysis of hits and CADD (computer aided drug design) to design and prepare focused compound libraries with enhanced anti-fusion activity. Using an iterative approach that couples antiviral activity with information from absorption, distribution, metabolism and elimination (ADME) studies Panacos will identify small molecule development candidates that are potent inhibitors of gp41-mediated fusion. The goal of this Phase I SBIR-AT-NIAID proposal is the identification of orally bioavailable HIV fusion inhibitor lead candidates with properties suitable for clinical development. This will be accomplished by: 1) Extending the current screening campaign in order to identify additional small molecule inhibitors of HIV fusion. 2) Utilizing secondary and tertiary assays to characterize hits from the primary screen. 3) Carrying out hit-to-lead optimization using results from 4) ADME and additional virology studies.